2013 to be export year for beef

Markets
Sep 20, 2013

In what’s being called a bearish report, USDA’s most recent World Agriculture Supply and Demand Estimates (WASDE) report showed some good things for beef.

Production estimates were upped for both this year and next on increased bull and cow slaughter throughout this year. Estimates of 25.68 billon pounds (bp) of beef were set for 2013 and 24.23 bp for 2014. These are both below the production of 2012, but up from earlier expectations this year.

The most exciting news on beef in the WASDE report was the drop in imports and the expectation of increased exports for 2013. Between the two of these factors, USDA has shifted its prediction of 2013 from the U.S. as a net importer of beef to the U.S. as a net exporter of beef.

Beef import predictions for 2013 dropped from 2.38 bp to 2.29 bp. Conversely, export expectations increased from 2.36 bp to 2.41 bp. The decline in imports stems from the trend set so far in beef imports, with cattle and beef from Mexico and Canada down, and imports of boneless beef from New Zealand and Australia down after an exhaustive season of culling. Exports on the other hand are up led primarily by exports to Japan so far, which has finally surpassed its level prior to the 2003 BSE incident.

In comparison, projections of imports for pork are up on all fronts; for 2013, for 2014, and for both years compared to 2012. Production expectations are also up for 2013 at 23.41 bp and remained unchanged for 2014 at 24.15 bp. The report pointed out the production estimate increase came from heavier hog carcass weights rather than slaughter, which has been down in recent months.

Due largely to the decreased expectations for imports and the increased expectations for exports in this and the coming year, per capita availability of beef estimates decreased for both 2013 and 2014. Down from the 57.4 pounds of beef available per person in 2012, USDA projects that number will be 56.7 pounds per person in 2013 and 54 pounds per person in 2014.

In comparison, though per capita availability was decreased for pork for both 2013 and 2014—at 46.9 and 47.9 pounds per person respectively—both expectations are above 2012’s 45.9 pounds available per person. This increased domestic availability of pork in competition with beef could increase the existing difficulty of beef features at the meat counter.

An important note on the nomenclature: in this monthly coverage in WLJ this topic is called “availability” rather than “consumption” as it is often called. Steve Meyer and Len Steiner of the CME Daily Livestock Report are of a similar mind and explained how the distinction is important.

“This is often called consumption but the reality is that no one knows how much gets consumed and how much either is lost between the packer and the time it reaches the consumer (shrink) and how much is actually left on the plate or put in the fridge to be thrown out the next day.” — Kerry Halladay, WLJ Editor

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